Sixth board in 11 years appointed at troubled SAA

SAA, the ailing state-owned airline, has many problems that start at the very top.

The Department of Public Enterprises, the sole shareholder of SAA, has appointed a new board – the sixth since 2009. The new board has been appointed on an interim basis, which doesn’t offer certainty about whether SAA will have a stable pair of hands at leadership level over a sustained period.

Even at an executive management level, SAA is led by an interim CEO in Philip Saunders, who is the fourth boss in five years. The airline also has an interim CFO, Deon Fredericks.

SAA is at a crucial juncture: its business rescue process, which was one year old on 6 December, is attempting to restart flight operations after SA’s aviation industry was grounded on 27 March due to the Covid-19 lockdown.

But the SAA business rescue practitioners are still grappling with the conclusion of retrenchment packages for workers, and the government paying the full R10.5-billion for the airline’s restructuring process.

The delays in the conclusion of SAA’s business rescue process means that it is getting left behind in the industry. Airlines such as Comair (the operator of British Airways and Kulula), Airlink, and Safair have taken to the domestic skies because lockdown rules have been substantially eased. 

SA even has a new domestic airline called Lift, which flew for the first time on 10 December.  Further delays in SAA’s restart will make it difficult for the airline to grab market share in an already constrained travel market, with low passenger load numbers and cheap airfares because of heightened competition among airlines.

But the Department of Public Enterprises believes that the stabilisation of SAA starts with the appointment of a new board. The department has appointed six non-executive directors to the SAA board; only three of them bring commercial aviation experience.

The board will be chaired by former Industrial Development Corporation CEO Geoff Qhena, who was at the helm for 13 years before he resigned in August 2018.

The aviation experience on the new SAA board lies in three individuals: June Crawford, who leads the aviation working group of the SA Business Council; Bembe Zwane, an aviation entrepreneur and former executive at Imperial Logistics and Equity Aviation; and Nick Fadugba, an aviation professional who has consulted and promoted aviation development in Africa.

In October 2020, Fadugba delivered a presentation to a group of ANC MPs, urging them to preserve SAA and conclude a strategic partnership agreement with Ethiopian Airlines. 

“There is inherent value in an existing airline which cannot be easily replicated in a new replacement carrier,” Fadugba wrote in the presentation. “After a thorough analysis, our preferred strategic equity partner for SAA is Ethiopian Airlines.”

Qhena, Crawford, Zwane, and Fadugba will be joined by Peter Tshisevhe, a lawyer specialising in mergers and acquisitions who was also part of the previous SAA board, and Edna van Harte, former dean of the faculty of military science at the SA National Defence Force’s military academy at Saldanha Bay. BM